THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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COL. TIMOTHY ALBENS, MASSACHUSETTS STATE POLICE: -- several explosive devices were discharged from the car at the police officers. In the exchange of the gunfire we believe that one of the suspects was struck and ultimately taken into custody. A second suspect was able to flee from that car and there is an active search going on at this point in time.

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JOHN BERMAN, CNN ANCHOR: The man identified by the FBI as suspect number one, suspect number one, was shot and he later died after being taken to the hospital. We've also learned that two suspects in the attacks are brothers. We suspect they are brothers right now.

Again, police believe that suspect number two, photographed Monday in a white baseball cap, is now on the loose in or near Watertown, Massachusetts. Public transportation has been shut down in and around Boston. A 1.3 million people use public transportation every day. All colleges and schools are closed as police continue this manhunt.

JAKE TAPPER, CNN ANCHOR: It's been an incredible night. It started, of course, earlier in the evening yesterday, late afternoon, shortly after 5:00 when the FBI released photographs of the suspect. Suspect number one in the black hat, suspect number two in the white hat.

Whether that shook the tree, whether that smoked them out, whether that had anything to do with what happened next, we don't know. But about five hours later on the campus of MIT.

As you mentioned, a police officer was killed, there was a shoot-out and now a massive manhunt. Suspect number one killed. Suspect number two on the loose. Earlier we heard from a witness who told us how they heard explosives.

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UNIDENTIFIED MALE: We thought we heard firecrackers so me and my son looked out our third floor window and we heard gunshots, and then we saw the explosion. Actually saw a black SUV come down Laurel Street, cross over, look like it hit a police car and then they were just shooting at that. We must have heard about 60 gunshots.

(END VIDEO CLIP) TAPPER: It is a city under siege to a large degree. Public transportation closed. The Amtrak line between Providence, Rhode Island and here in Boston, Massachusetts temporarily suspended. Individuals told not to go to work. Public schools closed. Colleges and universities closed.

Don Lemon is also in Watertown. Don, what is happening where you are?

DON LEMON, CNN CORRESPONDENT: Basically complete lockdown here. I think members of the media who have covered stories like this for years are stunned by what's going on here, again, on lockdown. They're telling people not to leave their homes.

And if someone comes to your door make sure you know who it is. If it's a police officer, let them in. But again, talking to police officers here in the area, they're saying listen. They believe they know who this person is, obviously. They have an identification. They know how old he is.

They know that he is armed and dangerous. They know he threw explosives out of the car as he came here. Quite honestly, what they've told us is to be completely careful and to be on the lookout because this person is probably trapped in this area. With this much police presence they don't believe that he could get out.

They're telling us if they come out, if they have those long rifles as they supposedly have, who knows what exactly they may start doing. Just moments ago we saw a couple bus loads of police officers coming in from the Boston area, and from other municipalities.

We've been seeing that all morning, the presence of police cars, tactical units, bomb squads and what have you coming into this area. They believe it's about a 20 block area in Watertown, but they're not exactly sure. There's one specific area, Nichols Avenue, our photographer who is there, said they've seen a bomb sniffing dog going in and out.

There's a SWAT team there and also saying that there is a chemist in there. I guess someone who is familiar with chemicals who is looking over material and the property there. So again Watertown, complete lockdown, not just Watertown, we're told Brighten, Newton, Waltham, Watertown, Belmont, Cambridge.

Basically most of the suburbs surrounding Boston on lockdown because of this one man who is believed to be in that white cap in the video that you're seeing there. One man who is armed and dangerous, and we know that is involved, with a police shooting, a police officer at MIT this morning.

One police officer dead again after they left that scene, throwing explosives out of the car, coming here and one of the suspects being shot, as well. We're here unprecedented, this town again on lockdown, on high alert.

Residents are staying in their homes. Those who are venturing out, some of them we saw going into Dunkin' Donuts, going in to get breakfast, come out and run right back into their homes.

Others walking their dogs a short distance and going right back in their homes, as well. Transportation on lockdown, no one getting in and out of Boston by bus or by train and even some sections of Amtrak between Boston and surrounding areas have been shut down as well.

You see the large presence there, the live pictures on your screen of those tactical units in and around the Watertown area -- Jake.

BERMAN: All right, Don Lemon in Watertown right now, in some ways at the center of this investigation. But the investigation clearly has grown much larger with public transportation in and out of Boston being shut down and people in surrounding towns being told to stay home, as well.

We have some live pictures right now. That's the National Guard driving through the streets right now in these armored Humvees. You know this is not a sight you see there in Watertown right now. That's where they're going door to door in the search for these suspects.

We should also tell you with all these developments overnight we're expecting a news conference from law enforcement at 9:00 Eastern Time. We will get more information then. Obviously, we'll bring that to you live.

That's a long ways from now. There could be a lot more that happens before that happens. Meanwhile, we have Deb Feyerick on the line who has been reporting the situation. Deb, what's the latest?

DEBORAH FEYERICK, CNN NATIONAL CORRESPONDENT: OK, well I've got some new information. This information has been cleared. And we're now going to tell you some details about the brother in the black hat, the one who is dead.

First of all, they do believe that he was killed by explosives. He may have had those explosives on his body. I'm being told by a terrorism analyst who's been briefed on this, the older brother, apparently went to Brooklyn community -- I'm sorry, went to Bunker Hill Community College, I apologize.

The family fled Chechnya several years ago and went to Kazakhstan. OK, they went to Kazakhstan before being granted permission to come to the United States. The older brother went to Bunker Hill Community College, Bunker Hill Community College.

He had ambitions to become an engineer, but he took a year off from school in order to box. So that's what we know about him. We are being told that they know people here in the Boston area, and those people are being looked at now.

There's a big question as to whether these brothers were able to remain hidden for the three days that they were essentially on the run, whether they, in fact, did that by themselves.

I'm also told that the older brother, the one in the black hat, posted on his website, quote, "I don't have a single American friend, I don't understand them." So that is what we are learning so far. The younger brother now is on the run. He is alone. He has been awake since midnight.

And so they are clearly engaged in a very active search for this individual. His brother, as I've said, was killed. He had explosives on him. Whether he self-detonated or whether they were detonated during the car chase, very unclear right now.

An autopsy has to be conducted. But again, we are still getting a very, very heavy presence here though we are learning more about the identity of the man who was killed last night just around midnight.

His brother now, the younger brother, on the run, still being looked at, law enforcement going door-to-door. They are making sure that there are no other devices, not only looking for him, but they want to make sure that there are no other devices that are out there that could potentially injure anyone.

This is really moving very, very quickly on many different levels. But once again, just to reiterate the older brother, he didn't drink, didn't smoke. He said, quote, "I don't have a single American friend, I don't understand them."

He was a college student at Bunker Hill Community College, with aspirations to be an engineer. That's what we know so far -- Jake, John.

TAPPER: Deb, that's some great reporting. Just to recap what you said. The older brother, suspect that that's the one who has been killed. Suspect number one with the black hat, went to Bunker Hill Community College.

He and his younger brother, who is suspect number two in the white hat, who is on the loose in Watertown or the surrounding area, those two and their families fled Chechnya, then the family went to Kazakhstan. And of course then they ended up here in the Boston area.

Deb, do your law enforcement sources have any information about what exactly the motivation was? I mean, it sounds to me like a classic story of radicalization, but you didn't say that so I don't know. What is the motive that you are suggesting or your law enforcement sources are suggesting or is there not one yet?

FEYERICK: Well, they're not suggesting any motive. The one thing we do know, and very dangerous, we don't want to go on this path, but because they are in Chechnya, Chechnya is largely Muslim. We do know that the brothers are Muslim.

That they are Islamic so we don't know just to what extent, whether they were radicalized at some point, but again, that could potentially be a motive. But right now nobody is making the connection. They're just telling me that yes, they're Islamic.

TAPPER: All right, Deb Feyerick, thank you so much for that. I want to bring in -- I'm sorry. John, do you have a question for Deb? BERMAN: One of the things we've been trying to figure out as this has progressed over the last few minutes, is the suspect, this brother, from Chechnya to Kazakhstan or is it possible from another part of the caucuses?

FEYERICK: No, initially we're being told they are from Chechnya and went to Kazakhstan. Again they may have moved. It's unclear. Just want to take a quick look right here. Another bus, they're bringing people out. They're bringing law enforcement in.

These gentlemen who are in that bus, they're dressed in full riot gear. It does appear now that we are being told that they were from Chechnya. That they fled during the conflict. Went to Kazakhstan and then made their way here to Boston.

Did they come to Boston because they knew somebody? Somebody who was able to give them help them with visas? That we don't know so all of that under investigation right now.

BERMAN: OK, Deborah Feyerick, thank you so much for that. Let's unpack that a little bit with some people who know a lot about this situation. Let's bring in Chad Sweet, former chief of staff with the Department of Homeland Security, also a former CIA officer. He is the co-founder and CEO of the Chertoff Group.

We have Tom Fuentes, former assistant director of the FBI, Juliette Kayyem here. A lot of information here first and foremost the brothers believed to be from Chechnya. Let's start with that.

CHAD SWEET, FORMER CHIEF OF STAFF, DEPARTMENT OF HOMELAND SECURITY: A couple points. One is, if they're in, fact, students at Bunker Hill College, there's the student immigration visa data base, which will follow things like we'll know exactly their biographic information.

There will have been fingerprints provided for the application, which will not only allow us again to not only do forensics on the post- blast investigation, but they also be able to tie this from an evidentiary point of view to prosecute them.

It will also be interesting to see as suggested before. We'll be able to zero in behind the scenes right now, all the focus is on tightening the noose around him. There's a lot of work that's being done behind the scenes that the American public doesn't see on going to the residence.

Right now, I suspect his apartment is being forensically checked as well. There's going to be a lot more information coming forward in the next few hours.

BERMAN: Juliette, Bunker Hill Community College, it's clear, he may be from Chechnya via Kazakhstan, but he was living, existing here, studying to be an engineer at Bunker Hill.

JULIETTE KAYYEM, CNN ANALYST: Right. We had always believed I think the last couple of days that this was a Boston-based attack simply because it seemed like the culprits probably built the bombs here. They probably walked over. They knew the marathon.

So a lot of this is not shocking although very, very surprising. And I would also add what we don't know and Chad made this point is they came from another country. And they were here as Bunker Hill College, which is a very good community college here.

What we don't know is, do they have ties to an international terrorist organization or any other international organization or are they just brothers who planned this on their own because they have some belief?

It's the difference between a masterminded terrorism attack like how we thought about 9/11 and these sort of low-grade, you know, to be honest sort of crazies who plan these kinds of events. That's relevant because that will tell us where the investigation is going to go.

What other countries have been involved with it and sort of the international implication of that. That we don't know. That we should reserve judgment on whether they were acting alone or had ties to a larger organization.

Right now, obviously, we're Chad makes a great point. There is a huge other piece to this. No one has seen, which is all the ties that these two brothers had here in Boston, and whether that leads us to any more knowledge about them.

But right now, all we know is that they planned this, who else they were aligned with, we don't know.

TAPPER: One could argue that obviously, you're not arguing to the contrary, the self-radicalized individuals like Nidal Hassan, the Fort Hood shooter, are the ones that are the biggest risk for this country right now.

Because intelligence has been so good and the United States has made so many changes post-9/11 to people, for what of a better term, the bad guys out of the country. Individuals in the country radicalize themselves some way. Hasan is said to have reached out to Anwar Al- Awlaki and radicalized himself.

KAYYEM: That's what we just don't know right now and that is, that is a great point. What we do know is that they tried to rob a 7-11. So that is sort of good news in the sense that it doesn't seem like they were had some major backing to get them out of here.

Mastermind terrorists are not do that. They have an exit strategy. So we're just putting the pieces together live, and just, you know, sort of trying to figure out whether there's a major international terrorist plan here, or is it two brothers who planned this on their own?

TAPPER: Let's go to Tom Fuentes, a CNN analyst and former assistant director with the FBI in Washington. I think Juliette has a good point, Tom. I really enjoy hearing your thoughts.

The fact that we're told that the brothers went to knock over a 7-11 to rob it. That that's apparently one of the things that they did last night, the fact that they clearly did not seem to have any elaborate exit strategy or help escaping.

Although we still do not know whether it was just the two of them. But if it was more than two it wasn't some big network. That would seem to be a small sliver of good news in this horrible, horrible story.

TOM FUENTES, CNN ANALYST: That's right. It would indicate that they weren't being supported from overseas or sent here to commit an act over here. They came, and as Juliette mentioned earlier, came here and then later self-radicalized and decided to commit the act.

That could be the result. If it's true, about the posting on the web page that they came, intended to go to school and study and get a degree but failed to assimilate and later got frustrated, that may have contributed to the thought patterns to do this.

I'd like to add one other point, in Canada in 2006, there was a group of terrorists later called the Toronto 18 and they have been tried and convicted and in prison. But one of the leaders of that group studied in mechanical engineering at a Toronto college.

And then he made a recruiting video where in the video he's got a toaster in his living room, wires it up, and is able to create a remote detonator off of a cell phone. He's self-taught, plus internet, plus his college training.

But it together because of that engineering course and was able to make the device and create the cell phone detonating mechanism to initiate that. As I said, the police later got that videotape because he was showing the tape to other potential applicants to prove how good he was and that he'd be able to do that.

I would be very curious of what courses either brother attended and whether they were able to learn the skills that they need, or enhance with internet reading, and amateur cookbook whether or not they were able to put that together and teach themselves as a result how to make those devices that exploded at the marathon.

BERMAN: It's a really key question. Tom Fuentes, sit tight for a second. We want to go to Joe Johns also in our Washington Bureau right now. You have some reporting on the plan of these brothers.

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Well, we do have some information. We have a little bit more information, but I wouldn't call it so much a plan. Talking to law enforcement officials, they're still in the stage of asking questions, just where these individuals may have learned how to make bombs like this.

Who was it that taught them? Did they learn by themselves on the internet or did they get information from overseas? And what motivated them? What specifically motivated them? These are all the questions authorities are asking.

And of course, there's a concern about the explosives. We do know this one individual apparently had explosives on his body. One of the big questions is whether the explosives on his body were detonated by him, were detonated by police shooting at him.

Or perhaps he was even run into by a car is one thing that's been suggested to me right now. So as far as the plan, I can't give you that much information because the authorities have not told me. Back to you.

BERMAN: All right, Joe Johns, thank you so much. You know, this attack was obviously planned at some level. The attack was here at the finish line of the Boston marathon bombings. But the getaway seems to be a little less meticulous.

I want to bring back in Chad Sweet right now. Chad, you know, what is your opinion of what happened not Monday but after Monday specifically last night and this morning?

SWEET: I think as Juliette said before when law enforcement and counterterrorism officials study this in the years ahead, this will be a case study on the right way to do this. It's 21st Century counterterrorism where essentially law enforcement and counterterrorism waited to show the public the photos.

That allowed these suspects to essentially get comfortable that they thought they would be able to stay within the perimeter. They only released the photos, essentially last evening at 5:15 and what we saw was immediately post that posting all of these events have unfolded.

Some of them we don't know could have been tipped off by public crowd sourcing where the public was brought in on this. It could have been that they panicked at that point and decided to flee, which led them to become sloppy.

I think a couple other points that Juliette noted which were excellent, if we look at how they conducted themselves throughout this process. It's amazing to watch the missteps. You know, the things like sticking within the perimeter.

If you think about to Faisal Shazad and the Times Square bomber, from the moment of the incident to the moment of apprehension, was just over 55 hours or. But we caught him literally on the plane, on the tarmac, pulling away from JF Airport.

We barely -- we almost missed him. These two individuals very possibly could have blended into society and we never would have caught them. This is the fantastic example of the right way to do it.

The other point I'd make quickly is that the city of Boston has been a role model for the nation, right? Because when this incident happened, they continued to operate around the city in a normal fashion for the most part. Airports open, et cetera.

But when the right moment came, that's when they did the lockdown. So they're demonstrating to the nation, this is the way you do modern counterterrorism. You remain resilient as a nation when these events happen and then you come together and do this type of all full-court press only at the moment when you have the relevant information.

TAPPER: We're looking at live pictures I believe from Watertown where this massive manhunt is going on right now. We're also told there will be a law enforcement press conference later this morning, possibly involving Massachusetts Governor Deval Patrick. Details are forthcoming.

If you are just joining us, it's been quite a night with one of the suspects in the Boston marathon terrorist attack killed in a shoot-out with police, possible he was killed by an explosive device that he was holding on his person.

Second suspect in the Boston terrorist attack, the second suspect, the younger brother of the first, according to great reporting from Deborah Feyerick, just a recap on that, the older brother who is dead, killed in a shootout with police either by explosives or gun shots or both.

The medical professional, the doctor that we spoke with wouldn't tell us. But he went to Bunker Hill Community College. He is and younger brother, who is the suspect number two, who is still at large, thought to be in Watertown, Massachusetts or in the surrounding area.

The two of them came from Chechnya. Their family fled Chechnya. They stopped in Kazakhstan before they came here to the United States. The older brother I believe -- is it the older brother or the younger brother who posted that on his Facebook page?

BERMAN: The older brother posted it on his Facebook page.

TAPPER: He posted that I don't have a single American friend. I don't understand them. It said that he did not drink. He did not smoke. We're still waiting to hear more information about what exactly motivated them although certainly we're picking up clues as to what was going on with them.

Most importantly for people watching right now, Watertown, Massachusetts, if you are in Watertown or the surrounding areas, do not leave your homes. Stay at home. Unless there is an identified -- cleared identified police officer who comes to your door, do not open your door.

Stay there. There is a massive manhunt for what the law enforcement community calls a terrorist who wants to kill people in your area. That's not just Watertown, but the surrounding areas of Waltham and Cambridge as well.

BERMAN: And someone who is hunkered down right now in her home in Watertown is Danielle Tumminio. Danielle, what's it been like over last few hours as you have been locked in?

DANIELLE TUMMINIO, CNN BELIEF BLOG WRITER (via telephone): It's been pretty frightening. We have heard sirens come by every couple of minutes. Probably 45 minutes ago we actually -- my husband caught out of the corner of his eye, somebody running past our parking lot. Wearing a blue hoodie and carrying a backpack and we -- you know, we're a couple of blocks away, so it seems like it might not have been the guy, but who is outside? We called 911 and we were both sort of huddled by the window. What is this that we even have to be doing this right now?

It's surreal. So it's hearing the fire engine is a little jarring, at the same time, we're watching CNN right now, we can see all the police coverage and all of the law enforcement. A tank on the screen, it's amazing how our government could bring that.

We feel very unsafe and they are really trying to keep us safe. But we're far enough from downtown Boston that I'm just sort of surprised that they are there at all. To me, it would seem to be a place that something like this would with happen, so far from the center of Boston.

BERMAN: We have a one-minute warning. Danielle, thank you so much, please stay safe. Stay inside. In about one minute, we understand we will see a news conference from Massachusetts Governor Deval Patrick who is now in Watertown right now.

We have so much to learn about the activities going on overnight there and in the surrounding towns as well. Just to bring you up to speed again, subways, buses, shut down. Schools closed.

A manhunt under way for suspect number two in the Boston marathon attack, one two of brothers we now know who came from Chechnya via Kazakhstan, the older brother dead. He was killed in a shoot-out with police last night.

He was a student at Bunker Hill Community College. He studied engineering there. The younger brother still on the run. This manhunt under way for him. There is some concern that he could have explosives with him. Why? Well, because the brother who did die had explosives on him.

TAPPER: According to a law enforcement source. When we talked to the doctor at Beth Israel Hospital, where suspect number one was taken, he was mortally wounded, where he died, the doctor would not tell us whether it was the explosion, or the gunshots, that killed suspect number one.

Suspect number two, the younger brother, still at large, and if you are in Watertown, are you told to stay inside your house, or the surrounding areas, told to stay inside your house. Do not open the door unless it's a clearly identified police officer.

This evening began quite shockingly just at 5:00 or 5:15, when police and law enforcement officials, the FBI released photographs, images of these two suspects, enlisting the help of the public in this pursuit of these two individuals, suspected of being responsible for the Boston marathon terrorist attack.

After that, five hours later, a shoot-out on the MIT campus. A campus officer killed, a shoot-out, a transit authority officer was killed, and the two brothers, the two suspects, suspect number one and number two, pursued to Watertown.

Suspect number one killed, presumably in the fire fight with police officers, but may have been from the explosion. Suspect number two still on the loose.

BERMAN: We do have one more piece of information about suspect number two. CNN has learned it does appear that suspect number two has been in the U.S. for at least a couple of years, which is interesting.

This man, of course, on the run right now. This manhunt under way, centered in Watertown, but surrounding towns -- people in surrounding towns told to stay in their home, be safe. Businesses closed. Subways and buses not running in and out of Boston. Amtrak not running.

All of the local colleges in the great college town, none of them are having classes today and to bring you the latest reporting, as we await this news conference. The latest reporting comes from our terrific reporter, Deborah Feyerick, who shed some light on the two brothers who are now believed to be the major suspects, one dead, one alive in the Boston marathon bombings.

They are from Chechnya. Apparently, they fled Chechnya, went to Kazakhstan, and ended up in the United States. The older brother was a student at Bunker Hill Community college where he studied engineering. He at one point posted on Facebook that he did not have a single American friend. He said he did not understand them.

TAPPER: We're waiting for a press conference and you are looking at live images from Watertown, Massachusetts. That's eight miles from downtown Boston. John Berman and I are standing here about two blocks away from the site of the terrorist attack at the Boston marathon finish line, which was on Monday morning or Monday afternoon rather.

Now it is early Friday morning, and we have been up all night covering this event. There was a shoot-out on the MIT campus. Two brothers were pursued to Watertown. One of the brothers has been killed. That is the older brother.

The younger brother is still on the loose. And police are attempting a dragnet, attempting to find him somewhere in Watertown or the surrounding areas. If you live in Watertown or the surrounding areas, ranging from Waltham, all the way east to Cambridge, you are advised to stay inside your home. We are awaiting the press conference any minute now.

BERMAN: As we said, we are suspecting it any minute. Stay with us.

OK, welcome back, everyone. We are learning more about the Boston marathon bombing suspects at this very minute. Law enforcement say they are brothers from Chechnya. The city of Boston on lockdown this morning.

State of high alert all around here. Public schools are closed as is public transportation and Amtrak service is shut down into the city. The manhunt for suspect number two, he is the one wearing the white cap in surveillance pictures. We have a news conference.

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GOVERNOR DEVAL PATRICK, MASSACHUSETTS: A couple points I want to make and then I would ask Commissioner Davis from Boston and then Colonel Alvin from the state police to make a statement. We are not going to take questions this morning.

I know have you a lot of questions. We have obviously a rapidly developing situation during the course of the night. I have been briefed throughout the night. I think you know the basics. Suspect one is dead. Suspect two on the run.

We have an NBTA officer seriously wounded and in surgery right now. We have an MIT security officer who is -- who had been killed. There is a massive manhunt underway --